Feb 14, 2012

I'm Having Trouble Getting Worked Up Over This

Janet Novack at Forbes is outraged that Social Security has taken 14 months to act on comments made when the agency made it impossible to retroactively withdraw a retirement claim in order to get a higher monthly benefit. Some people who had made plans to withdraw their claims have been unable to do so and she thinks that is unfair.

14 comments:

Anonymous
said...

These early retirees could do what many other early retirees do (and what many field office staff encourage) and just file for disability benefits. How many 62-year-olds do you know who cannot come up some type of ache or pain that would limit them to light work? Once you reach light work, it is just a matter of getting around any light or sedentary past relevant work.

Or they could simply delay retiring until they reach full retirement age -- what a novel idea.

I idea is not to apply for RSI later but to start receiving RSI at 62 (and reduced amount) then later receive full benefit amount, if still living, by withdrawing the original application and filing a new RSI application at full age & benefits. This requires repaying the reduced benefits already received. NOTHING ILLEGAL.

I idea is not to apply for RSI later but to start receiving RSI at 62 (and reduced amount) then later receive full benefit amount, if still living, by withdrawing the original application and filing a new RSI application at full age & benefits. This requires repaying the reduced benefits already received. NOTHING ILLEGAL.

Your math looks pretty good to me. If they were receiving $10,000 a year with early retirement at age 62, they would have been eligible for $17,600 if they had waited until age 70, but that's not adjusted for inflation. You said $20,000 which would be about an annual inflation rate of 1.6% per year over the 8 years. So it would take them until age 78 to break even. They could also switch to standard retirement at 66 which would give them a similar result - it would take them until age 78 to breakeven(without an inflation adjustment). It would take them slightly less than that if you adjusted for inflation. You haven't taken into account that the money they received was paid back interest-free but I doubt many seniors who need the early retirement have a lot of money in investments with any significant interest yields. And most of them won't have the money to pay back the early retirement payments either. At any rate, as you said, it's a gamble on how much longer they think they are going to live.

because it wasnt their money, that's why. they made a choice (supposedly) at age 62, which would have forgone any future higher amount of benefits. you take one or the other, not both and claim that paying it back makes the public whole, because we lost out on years of interest.

If you borrow from your 401K, you repay it with interest. This would be similar, in that a person repaying the money to the trust fund has, in effect, had a loan and could be required to pay interest. The idea is to make the 401K or trust fund whole. One guide states the principle so: "You then must repay the money you have accessed under rules designed to restore your 401(k) plan to approximately its original state, as if the transaction had not occurred."

One significant reason people did this was because they didn't understand the various benefit options that were available to them and they made a bad choice. For a married couple there so many alternative that never get explained. The SSA software doesn't offer these. If SSA would do a good job of explaining the options available, people would make better choices. But who cares 2024 is right around the corner.